NVIDIA’s stock took a hit of 5.6% following the official announcement of Huawei’s new AI accelerator, the Ascend 920, late last week. The product has raised concerns that it may capture a market share that NVIDIA could struggle to maintain, especially after being banned from selling its H20 AI accelerators in China. These accelerators had been a key source of revenue for NVIDIA.
Huawei’s Impact on NVIDIA’s Market Position
While there is a possibility that NVIDIA could sell its products in China again, it would require approval from the U.S. government, which seems unlikely given the current political climate. The release of Huawei’s new AI accelerator is seen as particularly tough for NVIDIA, as the new device has the potential to achieve results up to 60% of the H100, a powerful product from NVIDIA. This makes the Ascend 920 a viable alternative to the H20 AI.
NVIDIA’s Strategy Moving Forward
Though mass production of the Ascend 920 AI will not begin until the second half of 2025, it already looks set to bring in billions for Huawei. Meanwhile, NVIDIA, led by CEO Jensen Huang, will continue to face barriers, such as tariffs and export restrictions, on goods to China. Despite these challenges, Huang has made it clear that NVIDIA is not giving up on the Chinese market. He mentioned that the company is willing to pay the necessary costs and adjust its hardware to continue serving this lucrative market. However, NVIDIA has not revealed any concrete plans to tackle these current uncertainties.